Isaac adds to La.'s budget woes

As if Louisiana didn't have enough budget headaches, Hurricane Isaac just added another complication to the mix. While the federal government will pick up much of the costs of the state's expenses on preparation and response to the storm and its flooding, Louisiana must cover a slice of the spending.

The price tag for the state treasury is estimated to be as much as $40 million. That's already generating angst among lawmakers who are watching the tally of state needs and expenses again surpass the dollars available to them in the current and upcoming budget years.

The state built up a list of storm expenses, like the costs for mobilizing the National Guard, setting up and supplying shelters for evacuees, bringing food and water to damaged parishes and paying state employees for time worked on storm response.

Seventy-five percent of the cost is expected to be covered by the Federal Emergency Management Agency, though that could edge up to 90 percent if Isaac's damage hits certain benchmarks outlined in law.

Gov. Bobby Jindal also has asked the federal government to pick up all the state's costs for readying for and responding to the hurricane, which came ashore in August, bringing heavy flooding for some southeast Louisiana parishes.

State expenses for Isaac have hit $135 million so far, and agencies estimate storm costs will reach $161 million, according to Barry Dussi, director of the Office of Planning and Budget for the Jindal administration.

Dussi outlined the price tags recently to lawmakers on the Joint Legislative Committee on the Budget as some committee members worried about how those storm costs will eat into other areas of the budget.

Under the current cost-share arrangement, where Louisiana is expected to pay for 25 percent of the expenses, the state is on the hook for $34 million so far, estimated to grow to more than $40 million.

The Jindal administration is draining a $16 million state emergency response fund to pay for part of the cost. Where the rest of the money will come from is unclear.

Lawmakers and the governor could look to left-over funds from the budget year that ended June 30, but top officials disagree on how the money can be spent and where they'd like it to go.

Louisiana closed the last fiscal year with $130 million more in state income collected than was used in the budget, the Legislature's chief economist Greg Albrecht recently told a revenue forecasting panel.

Commissioner of Administration Paul Rainwater, the governor's chief budget adviser, wants to use the money to fill a $94 million hole in the state's Medicaid program, to avoid deeper cuts to the LSU hospital system and other health care services.

That approach could still leave dollars available to cover the remaining outstanding costs of Hurricane Isaac.

But there are some other, possible outstanding draws on the cash.

A budget bill passed by lawmakers earlier this year required funding up to $205 million to be used to replenish the state's "rainy day" fund, which was tapped to fill a recent deficit.

House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, sponsor of the budget bill, said that means the first draw on the leftover cash must be used to repay that withdrawal from the Budget Stabilization Fund.

That would leave no dollars available for Isaac expenses.

Rainwater disagrees with Fannin's assessment.

Even if lawmakers agree to disregard the rainy day fund repayment provision, questions remain about limitations governing how dollars deemed an official surplus, called "nonrecurring" revenue, can be used.

The state constitution allows the money to pay for bond payments, retirement debt, construction projects, coastal restoration projects and rainy day fund contributions.

Decisions on the $130 million in unbudgeted cash are expected to be debated during the next regular legislative session, which begins in April.

Isaac's outstanding price tag likely will be added to the list of budget concerns with which lawmakers will grapple during that session, with fingers remaining crossed until then that no other emergencies or unexpected events further drive up the costs of that list.